5 Tips to Save Money on Car Buying
Are you in the market for a new car, or in the process of determining if it’s the right time to purchase a car? While it can be an exciting experience, it can also be overwhelming if you don't know what you want or how much you can comfortably afford. These tips could help you get organized for your car buying experience.
1. Create a Budget
The first step when making any big purchase is to answer the question: how much can you afford? Figuring this out will give you a realistic picture of where you should begin in your car buying journey. You may want the latest model of your dream car, but your budget will reveal if that is a wise choice. When creating your budget, look for ways to cut expenses, such as limiting your spending where you can. Also, don’t forget to include other car-related expenses, such as insurance, maintenance, and gas that goes along with car ownership, in your budget.
2. Do Your Homework
Take the time to look for the vehicle that best meets your needs and budget; it will be time well spent. Research and compare market values for different vehicles, car dealerships, and prices to help you narrow down your choices. If it helps you, make a list of the features you want, what you can do without, and what features are a must-have. Look for incentives, discounts, and rebates that car dealerships offer to entice customers to buy. If special discounts aren't advertised, ask about them anyway.
Also, if you already own a car, consider trading it in and research what your vehicle is worth. Tracy, our Centralized Lending Manager, says:
3. Plan When to Buy
If time is on your side, you have various options for when you should head over to the dealership.
"If you're thinking of purchasing from a car dealership, most of them run promotions and sales multiple times a year. Once you review your budget and have a short list of vehicles that suit your needs, you may want to plan your purchase around those sales and promotional events."
4. Know Your Financing Options
Next, if you plan to finance your car, you'll want to get pre-approved by your financial institution. It's always a good idea to have your financing lined up before you visit a dealership, because it puts you in a better position to control your negotiating power. Salespeople are eager to sell you a car. Don't let the salesperson know right away if you are planning on trading in your vehicle. It's to your advantage to wait until you are satisfied with the price you'll be paying for your new car, before asking for a fair price on the trade-in.
Make sure you know the terms of your loan and how much you can afford.
"When considering your loan term, you'll want to know how much you can comfortably afford with your monthly payments and the length of your loan term. With a longer-term, your monthly payments could be lower compared to a shorter loan term. However, having a shorter loan term, allows you to pay your car off early and you could possibly save on the total amount of interest you'll pay over the life of the loan," said Tracy.
5. Seal the Deal
If you can get a couple of quotes before you buy, it may help you get an idea of the right price for the vehicle. Don't be afraid to let dealers know you are working with other dealerships, as this may help you get a better price.
To buy, or not to buy? You may be skeptical about purchasing a car in today’s market, and rightfully so. However, you could save money and comfortably enjoy your new ride with proper planning and the willingness to take a different approach to your car buying experience